These are paradoxical times for the digital-imaging industry. More people own image-capture devices than any time in history, and more photos are being taken than ever before. It’s a golden age for photography—or at least a golden age for photographers.

According to a slide presented by Ecce Terram’s Herwig Henseler, Facebook is the biggest photo library the world has ever seen.

On the other hand, it’s also a very difficult time for the traditional camera companies and printing services. Fewer people are using standalone cameras to capture all those images, and even fewer people are printing photos.

Smartphones—not cameras—are leading the current digital-photo revolution, thanks to a combination of convenience, connectivity, sharing apps, and ever-improving imaging capabilities. And the camera industry can’t help but take notice.

Where connected cameras stand

At the 2012 6Sight Future of Imaging Conference, part of the 2012 CE Week program at the Metropolitan Pavilion in NYC, panels of photo-industry executives and analysts talked about the current state of the camera market. Fittingly, smartphones took center stage in many of the discussions—not for their image quality, but for the connectivity and sharing features that have changed the digital-imaging landscape.

For several years, camera manufacturers have been offering models with built-in Wi-Fi features for sharing photos wirelessly. This year was a particularly big one for cameras with wireless-sharing features, as Samsung, Sony, and Canon all announced cameras and camcorders with built-in Wi-Fi features.

“We’re in a bridging stage for testing Wi-Fi connectivity,” said Samsung Senior Marketing Manager Jose Hernandez in Tuesday’s 6Sight Connected Cameras panel. “Consumers are used to a mobile platform with applications, and [cameras] will get very close to the system on other mobile devices—except for the ability to make phone calls.”

Despite the recent spate of Wi-Fi-connected cameras and the popularity of shooting and sharing images with smartphones, connected cameras aren’t exactly flying off the shelves. Sony’s Mike Kahn, general manager of Alpha camera systems, says that photographers may not consider wireless-sharing features a necessity in standalone cameras.

“[For a standalone camera] connected features are still a ‘nice to have,’” said Kahn. “It has to be a service that delivers. [Consumers are] used to that on a mobile device, but not necessarily a camera. We’re not going to fight the demand of the consumer, but we need to deliver it with the help of the infrastructure and the service provider.”

Wi-Fi isn't enough

It will take cellular connectivity, not Wi-Fi connectivity, for cameras to match the share-anywhere features found in smartphones. And as anyone with a smartphone knows, the convenience of being able to share photos from anywhere comes with the complexity of data plans and two-year contracts.

“Everyone here can build a camera with a [3G or 4G] radio in it,” said Steve Linke, associate director of Verizon’s device-marketing development, in Tuesday’s panel. “The question is what the business model is and how to support that.”

We may already be seeing the first clues of what that business model may look like with Verizon’s “Share Everything” data plans. The carrier’s pricing plans are centered around a pool of monthly data shared across multiple devices—phones, tablets, and computers for now—with additional fees for devices that use the same data bucket. Cameras may soon be one of the supported devices.

“There are a number of ways we could go to market,” said Verizon’s Linke. “There’s the iPad plan… buy the device and pick the carrier. The other plan would be a Kindle plan where the device and service are sold by the OEM. What we’re focusing on with our Share Everything plans is that it’s taking the focus off of voice. We’re turning it upside down and saying ‘buy a bucket of data’… You own a bucket of data you can use with a number of devices.”

“Do you have rollover data?” Sony’s Kahn joked, alluding to the fact that those data limits would present a conundrum for DSLR owners in particular.

For the most part, the better the camera you use, the bigger the file sizes you’ll have when you want to capture and share photos. If you’re using a DSLR with a high-resolution sensor and shooting in RAW, those high-quality images will be noticeably more beautiful than the ones you’d snap with a smartphone, so the ability to share them instantly would be very appealing. But when it comes to sharing them, you’d end up eating up your monthly data plan very quickly.

“The quality of the image has to come first,” said Kahn. “It’s hard to tell the consumer that the camera only works at certain levels or certain conditions. The question is do we have the bandwidth or the infrastructure to support a 24-megapixel image or whatever.”

While image quality is still a competitive advantage for standalone cameras, there are also advantages to low-resolution output when it comes to sharing. Giovanni Tomaselli, managing director at Ion Worldwide, a company that makes rugged camcorders with Wi-Fi streaming capabilities, said that reduced video resolution is essential to his company’s live-sharing features.

“I think you have to give the consumer the choice [between reduced-resolution video and full-resolution],” said Tomaselli. “When you look at creating that type of ecosystem, having that connectivity and making it seamless and secure, you can create a conversation around [live video]… Being able to see what you’ve just recorded on a ski lift after a ski run, or you can say ‘come to Facebook on Sunday and watch me go down the mountain.’”

In-camera interfaces need improvement

Being able to share images and video instantly isn’t the only uphill battle standalone cameras face. In general, the user experience leaves a lot of be desired in today’s connected cameras. Smartphones are designed specifically for connectivity and communication, while most cameras are designed to capture photos. As such, mobile devices have much bigger screens and much better user interfaces for establishing network connections, uploading photos to sites or apps, and inputting text. Many Wi-Fi cameras have offered touchscreen, phone-like interfaces for their connected features, but they often feel grafted-on.

“The consumer is sophisticated enough in using a smartphone or tablet that if you present them with a device that has the veneer of a smartphone, but if something’s not quite right when they interact with that, they see through that,” said Eye-Fi CEO Yuval Koren at Tuesday’s panel. “You need a first-class, full mobile OS, and you can’t fake it.”

Many cameras, as well as the “Direct Mode” found in Eye-Fi’s wireless storage cards, work around the interface problem by offering peer-to-peer connectivity between cameras and mobile devices. The idea there is that each device does what it does best: The camera’s superior optics, sensor, and controls take care of capturing the photo, while the smartphone’s better UI, various apps, and connectivity features take care of the sharing.

“I’d let the smart device do the work, but make sure the application on that device is world-class,” said Ion’s Tomaselli.

Of course, that sort of peer-to-peer connectivity still involves carrying around two devices: a standalone camera with wireless-sharing features and a smartphone. Eye-Fi’s Koren doesn’t think that will be a limiting factor for connected-camera technology in the long term.

“It’s not about replacing the smartphone or a zero-sum game in terms of devices [you’ll need to carry],” said Koren. “Could we be looking at a bigger market for these smarter and more-connected cameras in a couple of years? We think so.”

Despite the current “connected” craze in digital photography, there may be some light at the end of the tunnel for plain-old standalone cameras. In Tuesday afternoon’s analyst roundtable panel at the 6Sight conference, NPD Group Senior Imaging Analyst Liz Cutting stated that 32 percent of the past year’s interchangeable-lens camera sales went to 18- to 34-year-olds. That may signal the next phase of the ongoing digital-photography golden age: The current generation of smartphone users will eventually parlay their interest in photography to a more-capable camera, connected or not.